{"id":4119,"date":"2018-11-07T17:46:19","date_gmt":"2018-11-07T17:46:19","guid":{"rendered":"http:\/\/www.styledeals.co.uk\/blog\/michael-kors-and-coty-shares-hit-by-weak-european-sales\/"},"modified":"2018-11-07T17:46:19","modified_gmt":"2018-11-07T17:46:19","slug":"michael-kors-and-coty-shares-hit-by-weak-european-sales","status":"publish","type":"post","link":"https:\/\/www.styledeals.co.uk\/blog\/michael-kors-and-coty-shares-hit-by-weak-european-sales\/","title":{"rendered":"Michael Kors and Coty shares hit by weak European sales"},"content":{"rendered":"\n
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\"Women'sImage copyright<\/span>
\n Getty Images<\/span><\/p>\n

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Image caption<\/span>
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\n Michael Kors has been on a shopping spree, buying up Versace and Jimmy Choo, in a bid for growth
\n <\/span>
\n <\/figcaption><\/figure>\n

Shares in Michael Kors plunged on Wednesday following weaker-than-expected sales at its namesake brand.<\/p>\n

Sales at Michael Kors stores open for at least 12 months fell 2.1%, while licensing revenue was down almost 7%.<\/p>\n

The US fashion firm has responded to the struggles at its core brand by taking over luxury European labels Versace and Jimmy Choo.<\/p>\n

However, the benefits of those multi-billion dollar acquisitions are yet to be seen.<\/p>\n

Profits for Michael Kors sank 37% to $137.6m for the three months to 29 September compared with the same period last year.<\/p>\n

Total revenue was up 9% to $1.3bn, boosted by last year’s takeover of Jimmy Choo<\/a>, the British luxury footwear maker made famous by Sex and the City, for almost \u00a3900m.<\/p>\n

But at Michael Kors – which accounts for the bulk of the firm’s business – total revenue from retail, licensing and wholesale was roughly flat, while sales at stores in Europe fell by 10%.<\/p>\n

The firm blamed the declines partly on overly aggressive efforts to limit stock, as it tries to cultivate a more exclusive, luxury image.<\/p>\n

“The consumer is absolutely responding to the brand,” chief executive John Idol said. “We’ve got to get more inventory into the stores to be able to really build consumer demand.”<\/p>\n

Shares were down 14% at $49.42 in afternoon trading in New York.<\/p>\n

<\/p>\n

Image copyright<\/span>
\n Reuters<\/span><\/p>\n

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The firm’s acquisition of Versace<\/a> – announced in September and expected to be completed in the next six months – will position the company for growth over the long term, he added.<\/p>\n

The company, to be renamed Capri Holdings, plans to boost spending on marketing and open new Versace stores, with the goal of more than doubling the brand’s annual revenue to $2bn over the next few years.<\/p>\n

Coty struggles<\/h2>\n

Weakness in Europe also hurt US cosmetics company Coty, whose many brands include Covergirl, Max Factor, Bourjois and Rimmel. <\/p>\n

The firm posted a loss of $12.1m in the quarter, as revenues shrank by more than 9% year-on-year to $2bn.<\/p>\n

The poor results sent shares tumbling 18% in New York to $9.14. The stock has almost halved in value this year.<\/p>\n

Coty said demand for its more expensive products, such as perfumes and skin care associated with brands like Calvin Klein and Hugo Boss, remained strong.<\/p>\n

However, its consumer beauty segment was struggling, especially in Europe as well as the US.<\/p>\n

Supply chain issues, including a hit to a North Carolina factory from Hurricane Florence in September, also contributed to the problems.<\/p>\n

Chief executive Camillo Pane said the quarter was a “disappointing setback in achieving our financial targets and strategic goals, and we are working hard to solve the issues”.<\/p>\n

Shares were down almost 20% at $8.99 in mid-day trade in New York.<\/p>\n<\/p><\/div>\n


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Source<\/a> by [author_name]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Image copyright Getty Images Image caption Michael Kors has been on a shopping spree, buying up Versace and Jimmy Choo, in a bid for growth Shares in Michael Kors plunged on Wednesday following weaker-than-expected sales at its namesake brand. Sales at Michael Kors stores open for at least 12 months fell 2.1%, while licensing revenue … <\/p>\n","protected":false},"author":0,"featured_media":4120,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/4119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=4119"}],"version-history":[{"count":0,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/4119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media\/4120"}],"wp:attachment":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=4119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=4119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=4119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}